How did ‘Hamilton’ tickets get so expensive? And what does that mean for future big events?

Originally published April 5, 2018 at 6:00 am

Seattle caught “Hamilton” fever when a tour of Lin-Manuel Miranda’s juggernaut of a musical came to the Paramount Theatre in February. (Joan Marcus)

This fall, tickets to “Hamilton” at the Paramount Theatre ranged from $69 (original price) to $10,149 (resale price) — all on Ticketmaster’s online platform, which is supposed to be anti-scalper and anti-ticket bot. How did that happen?

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Hurricane “Hamilton” has blown its way out of Seattle, headed for points south.

But it’s left questions about ticket prices in its wake. Some of the seats during its six-week run at the Paramount were listed on Ticketmaster’s official site for hundreds and thousands of dollars above their original cost — offering an example of how Ticketmaster’s pricing and its secondary market work these days, and perhaps previewing what could happen with upcoming big-name shows like Beyoncé and Jay-Z at CenturyLink Field this October.

When the nonprofit Seattle Theatre Group (STG) released “Hamilton” tickets via its for-profit ticketing partner Ticketmaster on Nov. 6, it set prices at $69 to $179 (with a few “premium” seats going for $569).

Those tickets sold out within a day. “Hamilton” fans looking for tickets on STG’s website were routed to Ticketmaster’s site, where “verified resale” tickets were all over the place, from $200 each to a couple of seats at a March 10 show going for $10,149 each.

STG said the price for “Hamilton” tickets on Ticketmaster’s resale site averaged out at $412.

How did tickets that originally went on sale in the $69-$179 range (excepting those “premium” seats) wind up costing so much, through a ticket vendor that’s supposed to be anti-scalper and anti-bot?

“It’s really, really confusing on any number of levels,” said Dean Budnick, co-author of “Ticket Masters: The Rise of the Concert Industry and How the Public Got Scalped” and editor of Relix music magazine. “I just wish there were more transparency about the whole process — pricing, fees, how many tickets go into presales — just so people in the public could make a more reasoned decision.”

One part of the equation seems simple: supply and demand. If you buy a ticket to “Hamilton” for $100, from Ticketmaster, you can turn around and sell it on Ticketmaster’s “verified,” “fan-to-fan” resale marketplace for whatever price you like — $200, $2,000, $20,000 — then bump the price up or down depending on how the market is fluctuating. Ticketmaster promises that its resale tickets are genuine.

The other part of the equation is less obvious: the fees that Ticketmaster charges at each step of the process, from the initial purchase to the final resale, which can influence how much the resellers are charging.

During the Seattle run of “Hamilton,” STG spokesperson Julie Furlong said, Ticketmaster levied an 18 percent fee for the initial buyer, a 14 percent fee if that buyer decided to sell the tickets, then a 16-to-19 percent fee for the next buyer and so on, until the ticket reached its final owner.

Ticketmaster’s resale platform, Budnick said, nudges out bots, but the company also sees the “verified resale” secondary market as a huge growth opportunity: “That’s where they can generate revenue, through their official resale site, where they are receiving a percentage of the resale market. Ticketmaster is helping fans — but they’re really helping themselves.”

Josh LaBelle, STG’s executive director, said the nonprofit partnered with Ticketmaster “largely because of their commitment to thwarting the bots,” and to protect fans from buying forged tickets on sites like Craigslist.

STG had left Ticketmaster around 10 years ago to partner with Tickets.com, LaBelle said, but returned to Ticketmaster, partly because the ticketing giant’s “verified fan” program — which sounds like, but is different from, its “verified resale” secondary market — is intended to weed out scalpers and bots with tools like limits on how many tickets one customer can buy at one time. (Though a 2016 investigation into ticketing by the New York Attorney General concluded that “ticket limits are not regularly enforced” by vendors, including Ticketmaster.)

As Ticketmaster describes the “verified fan” program on its website: “We built a really big robot to protect fans from the thousands of little scalper bots trying to scoop up the tickets.” For customers, the process involves registering with Ticketmaster, then waiting for an access code allowing them to buy tickets.

Washington state lawmakers were already on the march against scalper bots — in early February, Attorney General Bob Ferguson announced two secondary-market companies based in Massachusetts would pay a $60,000 fine for violating Washington’s anti-bot law, passed in 2015. (Both companies, owned by Taylor Kurth, used bots to suck up tickets for Beyoncé and Adele concerts, as well as Mariners games.)

Meanwhile, forged tickets have already lured unsuspecting would-be ticket buyers. During STG’s two-week “Book of Mormon” run in January, LaBelle said, “we had an average of 20 tickets a night coming in as fraud — bogus tickets.”

In contrast, during the entire six-week run of “Hamilton,” STG reported a total of 20 fraudulent tickets.

STG had not used Ticketmaster’s “verified fan” and “verified resale” programs for “Book of Mormon,” while it did for “Hamilton” — Furlong said that may have been a factor in the drop in fake tickets but, she added, “there is no way for us to know what specifically led to the decrease.”

“I hate the secondary market,” LaBelle said. “I wish it was illegal in our state. It’s not in the public’s interests to pay more money for tickets than was originally intended by the theater and by the artists. It’s just not in the best interests of culture.”

The soaring secondary-market prices on Ticketmaster’s own site reveals that “there are two parallel stories in terms of what Ticketmaster is trying to accomplish,” Budnick said.

On one hand, he said, the company is “actively trying to limit bots from snarfing up all the tickets as soon as they go on sale.”

And Ticketmaster, which merged with entertainment behemoth Live Nation in 2010, wants people to trust its “verified resale” secondary market, pushing out the kinds of grifters who, for example, advertise forged tickets on Craigslist to sell for cash in a parking lot. (During Seattle’s “Hamilton” run, police arrested two men for allegedly peddling fake tickets forged on real ticket stock police say might’ve been stolen during a burglary at STG’s Neptune Theatre.) If you buy a resold Beyoncé/Jay-Z ticket on Ticketmaster’s secondary market, Ticketmaster promises it’s real — even if you paid $2,000 more than its original, face-value price.

On the other hand, the “verified resale” platform that Ticketmaster built allows the company to reward itself with fees while other people do the work of moving tickets around.

“If one wanted to be really cynical,” Budnick said, “by preventing bots, Ticketmaster is just ensuring that people buying tickets on the resale market are using the Ticketmaster platform. The astronomical secondary-market prices are so high, the fees elude people now. But at the end of the day, they’re a business. They’re allowed to do that.”